Aldar retires $1.25bn bond, reduces debt cost

Abu Dhabi, June 4, 2014

Aldar Properties, an Abu Dhabi-based property development, investment and management company, has repaid a $1.25 billion bond that matured at the end of May.

The bond carried an annual interest cost of 10.75 per cent and it was repaid using cash and by drawing down on committed liquidity facilities that carry an annual interest cost of 1.7 per cent, said a statement.

The company has refinanced or agreed new terms on all its financing facilities since its merger with another property firm Sorouh and has achieved significant interest savings. Its weighted average cost of debt has reduced from 5.8 per cent to 2.8 per cent, it said.

Since completing the merger last year, Aldar has reduced its gross debt from Dh14.2 billion ($3.8 billion) to Dh10.1 billion and following the repayment of the bond continues to maintain a strong cash position of Dh3.8 billion of cash as on May 31.

The company is now forging ahead with new developments in Abu Dhabi with nearly Dh40.7 billion in assets, including 77 sq m of land for development.

Abubaker Seddiq Al Khoori, chairman of Aldar Properties, said: “The bond repayment marks an important milestone in our strategy to deleverage and reduce borrowing costs, and we are entering the next phase of Aldar’s growth from a position of financial strength. We have seen very strong demand for the three new developments that we recently launched, with a combined gross development value of approximately Dh5 billion. Meanwhile, we are assessing 20 other development projects as we look to monetise Aldar’s extensive land bank and continue to create significant value for our shareholders.”

Greg Fewer, chief financial officer, said: “Our strategy to continue deleveraging the business and reduce the company’s annual interest payment is well advanced. Thanks to our refinancing initiatives the company will now pay Dh700 million less annually to service our debts - a reduction of 70 per cent over just one year. We continue to remain focused on deleveraging the business and optimising our cost of capital as it is an important driver of value for our shareholders.” - TradeArabia News Service